House Passes Tax Bill, but Will Have to Vote Again
The House passed the Republican tax plan on Tuesday. However, lawmakers will have to vote again on Wednesday after the Senate parliamentarian rejected three provisions in the Senate bill.
By REUTERS on Publish Date December 19, 2017. Photo by Tom Brenner/The New York Times. Watch in Times Video »
WASHINGTON — Republicans took a critical step on Tuesday toward notching their first significant legislative victory of the year as the House voted along party lines to pass the most sweeping rewrite of the tax code in decades and the Senate was on the verge of also approving the $1.5 trillion tax bill.
The bill would be the biggest legislative accomplishment for Republicans since President Trump took office and gave the party control of all the levers of power in Washington.
"Today, we are giving the people of this country their money back," Speaker Paul D. Ryan of Wisconsin said before the House vote. When the bill passed the House, a giddy Mr. Ryan smiled broadly and banged the gavel with force as he declared victory.
The day was not without hiccups, however, as several small provisions in the tax bill were found by the Senate parliamentarian to violate the budget rules that Republicans must follow to pass their bill through a process that shields it from a Democratic filibuster. As a result, the House will need to vote again on the tax bill, probably on Wednesday, since both chambers must approve identical legislation.
The approval of the bill in the House on Tuesday came over the strenuous objections of Democrats, who have accused Republicans of giving a gift to corporations and the wealthy and driving up the federal debt in the process.
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"This G.O.P. tax scam is simply theft — monumental, brazen theft from the American middle class and from every person who aspires to reach it," said Representative Nancy Pelosi of California, the House Democratic leader, who called the tax plan "a vote to install a permanent plutocracy in our nation."
The House voted 227 to 203 to pass the bill, with 12 Republicans voting against it and no Democrats voting for it. Eleven of the 12 Republicans were from California, New Jersey and New York, states that would be hit hard by a provision in the bill limiting the deduction for state and local taxes.
Under the final tax bill, the corporate tax rate would be cut to 21 percent, from the current 35 percent, a move that Republicans are betting will increase economic growth, create jobs and raise wages. Individuals would also see tax cuts, including a top rate of 37 percent, down from 39.6 percent. The size of inheritances shielded from estate taxation would double, to $22 million for married couples, and owners of pass-through businesses, whose profits are taxed through the individual code, would be able to deduct 20 percent of their business income.
But the individual tax cuts would expire after 2025, a step that Republicans took to comply with budget rules, which do not allow the package to add to the deficit after a decade.
The tax changes will affect businesses and individuals unevenly, with winners and losers often being determined by industry or geography.
The reach of the bill extends beyond taxes. It strikes at a core component of the Affordable Care Act, eliminating the requirement that most people have health coverage or pay a penalty, a move that the Congressional Budget Office projects will increase premiums for people who buy insurance. It also would open the Arctic National Wildlife Refuge in Alaska to oil and gas drilling, a defeat for environmentalists who have fought against such action for decades.
The last-minute parliamentary stumble involved several small components of the bill, according to Senate Democrats, including a provision that would have allowed the use of 529 savings accounts for homeschooling expenses and part of the criteria to be used to determine whether universities are subject to an excise tax imposed on their investment income. The parliamentarian even ruled against the bill's name, the Tax Cuts and Jobs Act, since the provision creating the name did not influence spending or revenue, as each provision must under Senate budget rules.
The chief tax writer in the House, Representative Kevin Brady, Republican of Texas and the chairman of the Ways and Means Committee, was unruffled.
"Our belief is, 'So what?'" Mr. Brady said on Fox News. "If we can get to vote twice on cutting taxes for families and small businesses, glad to do it."
Republicans in Congress moved with remarkable speed in their bid to enact the biggest tax overhaul since 1986, unveiling legislation to rewrite the tax code, marshaling support for their effort and devising a compromise between the House and Senate in under two months.
The success within reach would be a stark contrast with their attempt this year to repeal and replace the Affordable Care Act, a quest that was encumbered by internal divisions among Republicans and ultimately ended in humiliating failure.
"People wanted to get it done," Senator John Cornyn of Texas, the No. 2 Senate Republican, said of the tax rewrite. "That's the single biggest difference."
It would also give Mr. Trump a signature accomplishment as the first year of his presidency nears an end. After the House vote, Mr. Trump took to Twitter to congratulate House Republican leaders as well as "all great House Republicans who voted in favor of cutting your taxes!"
Congratulations to Paul Ryan, Kevin McCarthy, Kevin Brady, Steve Scalise, Cathy McMorris Rodgers and all great House Republicans who voted in favor of cutting your taxes!
— Donald J. Trump (@realDonaldTrump) Dec. 19, 2017
In recent days, critics of the tax bill have argued that it will enrich a number of Republican lawmakers who supported it. They pointed specifically to Senator Bob Corker of Tennessee and Mr. Trump himself, who both hold real estate investments that will get favorable tax treatment through the legislation.
How Each House Member Voted on the Tax Bill
The House passed the Republicans' tax overhaul bill. The bill will now head to the Senate for a vote.
The White House press secretary, Sarah Huckabee Sanders, pushed back on the notion that the Mr. Trump would save money as a result of the tax plan. "I know that there are a number of provisions that would negatively impact the president personally," Ms. Sanders said.
At the Capitol, the mood among Republicans was largely triumphant. But Democrats were already looking ahead with a focus on next year's midterm elections, when they hope to wrest control of the House and Senate. Polls have shown that the Republican tax overhaul is unpopular with the public, and Democrats hope to turn the biggest Republican legislative achievement into a liability in next year's races.
Senator Chuck Schumer of New York, the Democratic leader, warned that Republicans would come to regret rushing the tax bill through Congress on their own.
"This tax bill will be an anchor around the ankles of every Republican," Mr. Schumer said.
Protesters also made themselves heard on Tuesday, interrupting speeches by Mr. Ryan and Senator Orrin G. Hatch of Utah, the chairman of the Senate Finance Committee. The Capitol Police reported a number of arrests.
But Republicans predicted that their support of the tax bill would be vindicated as voters see its effects.
"I frankly think Democrats have overplayed their hand," Mr. Brady told reporters, "because when people back home and our local businesses see the tax relief, they're going to know they weren't really told the truth by the opponents of tax reform."
While the effect of the bill on people's bank accounts and on the broader economy remains to be seen, there was little debate on Tuesday about the magnitude of what Republicans were on the verge of accomplishing.
Bob Packwood, the former Republican senator from Oregon who helped lead the 1986 tax effort, said that this year's bill was at least as sweeping as the one that Ronald Reagan signed into law 31 years ago, even though the bills had different goals.
"They have achieved things that I was unable to achieve," Mr. Packwood said.
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